Grade 10 Business: Unit 1

Business

An organization that produces or sells goods or services to satisfy the needs, wants, and demands of consumers

Good

An item that can be seen and touched (tangible)

Service

Providing assistance to others that does not result in a tangible product (intangible)

For Profit:

Goal is to make profit by supplying goods or services to meet consumer demands

Non-Profit:

Raises funds for a specific goal (Ex. charities)

Not-for-Profit:

Surplus funds are used to improve services for their members (Ex. Daycares, YMCA)

Profit:

Income that is left after all costs and expenses are paid

Expenses

Costs that come with running a business

Cost

The amount of money required for each stage of production

Profit Statement

Profit = Revenue - Expenses + Costs

7 Characteristics of a business

1. Jobs

2. Roles in the Community

3. Profit or Non-Profit

4. Large or Small

5. Forms of Business Ownership

6. Goods or Service

7. Channels of Distribution

Jobs:

A business can be classified by the types of  jobs it provides.

Roles in the Community:

A business can be classified by the functions it performs in its community. Ex. The Canadian Diabetes Association offers support and raises funds to help patients diagnosed with diabetes.

Profit or Non-Profit:

Non-profit: Raise funds for a specific goal or cause or community without taking profit (i.e. charities)

Profit: Satisfy societal needs and customer demands by selling a good or service for the purposes of making a profit

Large or Small

Small and medium businesses employ less than 500 people. Large businesses employ more than 500 people. There are over 1 million SMB (small/medium businesses) in Canada who employ 60% of the Canadian workforce.

Forms of Business Ownership

A business can be referred to informally by how it is owned.

There are 5 forms of business ownership:

• Sole proprietorship

• Partnership

• Corporation

• Co-operative

• Franchise

Goods or Service:

Goods are a physical item,

Service is something you pay for that is not physical.

Some places provide both products and services like restaurants.

Channels of Distribution:

How a business delivers goods and services to its customers. Some stores are “brick and mortar” businesses (fitness clubs, retail stores, etc.). Other businesses are less visible and distribute through telephone marketing, catalogues, e-commerce, etc.

Product Obsolescence:

A product that has become obsolete has experienced a decline in its value brought about by an introduction of new technology or changes in demand. As technology changes, new products replace existing ones. The process is ongoing. 

Order of Maslow’s Hierarchy of Needs

1. Physiological

2. Safety & Security

3. Social

4. Esteem

5. Self Actualization

Need

Basic survival needs for individuals include food, water, clothing, and shelter

Want

Something that is unnecessary but adds comfort or pleasure to our lives

The Decision Making Process

Step 1: Determine what decision has to be made

Step 2: Identify the alternatives

Step 3: Evaluate the advantages and disadvantage of each alternative

Step 4: Make a decision and take action

Step 5: Evaluate the Decision

Natural Resources

Materials that come from the earth, water & air

• Most are non-renewable and limited

• Some take decades to replenish (such as forests)

• Include soil & trees

Capital Resources

Usually last for a long time & require a large investment

• Include buildings & equipment

Human Resources

• Labour

• People who work to create the goods and services

• Ex. Farmers & Factory workers

Interdependence

All resources are connected and depend on each other

Law of Demand

Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price.

Law of demand and its relationship to prices and consumers is defined as the following:

• When prices deccreases consumers buy more and demand goes up

• When prices increase consumers buy less; demand goes down

Equilibrium Price

If we combine the demand and supply needs we can see where the most number of buyers and sellers are satisfied! This is called the equilibrium price.

Demand

The quantity of a good or service that consumers are willing=g and able to buy at a particular price. 

• Everyone has different needs and wants and different budgets so we each have different demands

Supply

The quantity of a good or service that businesses are willing and able to provide with a range of prices that people would be willing to pay.